Today, the US Senate passed the infrastructure bill. While it still needs approval from the House, it is a significant piece of legislature. Here, we’ll analyze the impacts of the proposed $65B allocation for broadband, intended to solve the digital divide between those who have high-speed access to the Internet, and those who do not. The bill rightfully treats broadband as it should be – a necessary part of every American’s life – and one that should not be dependent on income. The entirety of the bill is published here, although we’ll summarize some of its key points:
- $42B will be allocated to states for broadband projects
- $14B is allocated for low-income households as a $30 per month voucher for broadband
- The new threshold is 100 Mbps for download speeds and 20 Mbps for upload speeds
- Service providers must provide details of locations which broadband service is provided
Let’s break down the impact of each of these points in detail…
State Broadband Projects
States, or more likely municipalities, will be in control of a large part of the funds for broadband. This allocation makes sense and puts the money in the hands of the communities that know what areas are unserved (no broadband) and areas that are underserved (lack of affordable broadband).
During COVID, states and local governments have already started the process of building their own networks. California announced $6B and Virginia announced $700M for broadband networks, to name a couple. The city of Tucson is ahead of the game, and can be used as an example, building out a private city network.
With new wireless equipment, along with recently allocated unlicensed wireless spectrum, there will be more examples of municipalities creating their own networks to ensure their residents have affordable access to the Internet.
The $30 per Month Target
Today, the average Internet bill in the United States is nearly $60 per month. The announced voucher of $30 per month for low-income households means that a subscriber would need to cover half the amount at current prices. Yet the price point in the bill offers a big hint… broadband prices should not be $60 per month.
It is entirely possible that with competition from new service providers, which might include municipalities and non-profits, and with new network equipment and deployment strategies, that a service provider might hit the $30 per month target for broadband (100 Mbps). This effectively offers the service for free, with the voucher, for low-income households. This becomes the new target price point for service providers.
The 100 Mbps Download Target
Technically, it is not difficult to provide 100 Mbps download speeds in urban and suburban areas. For many Americans that have access to these speeds but do not subscribe, the issue is affordability (see above). In other areas – especially rural communities – the issue is accessibility. To solve the accessibility issue, the US government is providing funds to connect all Americans with broadband in a similar way that electricity was rolled out across the US in the 1930s.
Why 100 Mbps? The old FCC threshold of 25 Mbps is outdated. As we all learned during work-from-home and learn-from-home restrictions during COVID, much of work and school is now done with video streaming applications. A typically family of four, on the Internet at the same time with video streaming, needs 100 Mbps speeds to function.
For communities without access to 100 Mbps, there are basically two options to get Internet: wired or wireless. While fiber and cable are certainly options, it requires significant investment to lay wired lines to all homes and businesses. Recently, wireless speeds have increased with 5G to make 100 Mbps a reality using wireless instead of wired. As our partner Aervivo details, using wireless can often be a 10x savings when compared to fiber deployments.
The Details of Broadband Service
In many cases, details of broadband speeds and coverage areas is offered by the Internet Service Provider. This can lead to inaccuracies as the data is often exaggerated for marketing purposes. Even the FCC acknowledges this issue.
The infrastructure bill intends to address this issue, although there is still a lack of clarity on how the data will be more accurate than current maps. At Airwaive, we solved this issue. We help service providers with easy-to-read coverage maps that can pinpoint specific addresses. Because we know the deployment of every wireless access point, a potential customer can type an address and find the nearest access point, and if it is within range or out of range. The days of static, 2D coverage maps are behind us now. The days of affordable, fast Internet for everyone lies ahead.